A fundamental understanding of the molecular mechanisms underlying osteoblast differentiation is critical for developing novel therapeutics to treat osteoporosis and to enhance bone fracture healing. Indian hedgehog (Ihh), one of the three mammalian homologs of the Drosophila Hedgehog (Hh) gene and the only known Hh gene expressed in the vertebrate skeleton, is indispensable for osteoblast differentiation in the endochondral skeleton. Because Ihh deficient mice arrest early in the development of the osteoblast lineage, it is therefore not known whether Ihh is also important for later stages of osteoblast differentiation. Moreover, the molecular mechanisms underlying the early roles of Ihh in osteoblast differentiation are not known. This proposal sets out to expand our knowledge about the potential roles of Ihh in osteoblast differentiation and to determine whether Ihh functions by interacting with other molecules important for this process. Three Specific Aims are proposed. Aim 1: to examine potential roles of hedgehog signaling in preosteoblasts and osteoblasts. Specifically, the Cre-loxP technology will be used to remove the gene Smoothened, which encodes an obligatory component of the Hh pathway, from preosteoblasts and osteoblasts; Aim 2: to assess relationship between Ihh and Cbfa1 in osteoblast differentiation. In the Ihh null mutant, Cbfa1 expression is abolished in the perichondrium of the long bones, where osteoblasts first arise during development. In order to determine whether Cbfa1 deficiency is solely responsible for the osteoblast defect, Cbfa1 wilI be forced-expressed by a genetic means in the perichondrium to examine whether osteoblast differentiation is restored in Ihh null mice; Aim 3: to examine interactions between lhh and Wnt/b-catenin signaling pathways in osteoblast differentiation. Although the Wnt canonical signaling pathway has been implicated in osteoblast proliferation and function in postnatal life in both mice and men, genetic evidence linking Wnt signaling to osteoblast differentiation is lacking. Therefore Cre-loxP technology will be used to remove b-catenin from the progenitor cells of the osteoblast lineage. Biochemical analyses of the potential interaction between Ihh and b-catenin signaling pathways will also be performed in a cell culture system. Finally, genetic experiments will be performed to determine whether artificial activation of b-catenin signaling will rescue the osteogenic defect in the absence of Hh signaling.